South Korea’s Financial Services Commission (FSC) has issued new guidelines to regulate non-fungible tokens (NFTs), classifying certain NFTs as regular cryptocurrencies if they lose their unique characteristics.
This clarification comes ahead of the “Virtual Asset User Protection Act,” effective July 19.
The FSC will treat NFTs as cryptocurrencies if they are mass-produced, exchangeable, fractionalized, or used for payments. At the same time, non-transferable tokens with minimal economic value will be considered regular NFTs.
This regulatory effort aims to provide clarity in the digital asset sector. The FSC highlighted that classifications will be determined on a case-by-case basis.
In 2023, the FSC also proposed mandates for crypto holdings disclosure and announced that digital asset investors must receive interest on crypto exchange deposits.
The Bank of Korea also plans to launch a pilot central bank digital currency (CBDC) program in Q4 2024.
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